Short answer or long answer ...
- State appropriation for public universities is around 20% below 2001 levels, per full time student. Price has gone up and at lower tier places quality has gone down (guess who mostly clusters at lower tier publics?).
- This is a separate issue from "cost," which is what the schools spend to provide the service. Like other personal services from child day care to your dental bill, cost has gone up over time relative to "goods" like groceries and most manufactured products.
- Students who have flooded into post-secondary education over the past 25 years have come mostly from the bottom half of the income distribution. They're needier, and that pushes up the demand for loans. Loans facilitate education.
- Students with average amounts of debt (26K - 33K) who graduate with a degree tend to have little problem with repayment.
- The bulk of the "crisis" narrative is based on students at for-profits and in graduate school.
- Extract the for-profits from the data and the numbers shrink. Debt > 45K is quite common in that sector, and the return to a for-profit degree or certificate is often too low to effectively repay.
If you really want to understand this ... Stephanie Cellini on "Gainfully Employed"
- Extract graduate debt. Borrowing for and MBA, MD, JD and other "professional" things is not a big source of default, but is a big source of eye-popping anecdotes.
These people tend to have high incomes. They would love to have their debt forgiven.
Some basic facts about who owes what ... Fed data on student debt